General Dynamics bolsters gov IT

In a move to strengthen its government information technology capabilities, particularly for military and intelligence agencies, General Dynamics Corp. this week announced that it has entered into an agreement to acquire Motorola Inc.'s Integrated Information Systems Group.

The Motorola division, based in Scottsdale, Ariz., provides defense and government customers with technologies, products and systems for secure communication, information assurance, situational awareness and integrated communication systems. The division has 3,000 employees, including 1,100 engineers, and anticipates revenues in 2002 of about $830 million.

The asset purchase agreement, which is for $825 million in cash and the assumption of certain liabilities, has been approved by the boards of directors of both companies and is expected to close within 60 days. The business will become part of General Dynamics' Information Systems and Technology group.

As part of the transaction, Motorola and General Dynamics executed a series of agreements that will give government customers continued access to applicable Motorola commercial technologies.

"This acquisition strengthens our position in communications and information technology for military and government customers, and strengthens our capabilities in C4ISR [command, control, communication, computers, intelligence, surveillance and reconnaissance]," said Nicholas Chabraja, General Dynamics chairman and chief executive officer.

Christopher Galvin, Motorola chairman and CEO, said the company decided to focus more on business areas tied into its long-term strategy, and that "General Dynamics, with its strong government focus, will be the right home for Integrated Information Systems' employees."

Mark Fried, corporate vice president and general manager of Motorola Integrated Information Systems Group, will remain president of the business after the transaction is completed.

Margot Brown, a Motorola spokeswoman, said that the group's government customers will not experience any change in their dealings with the company. "Any agreements will remain in full force and effect."

She said all employees will be kept on and that the division is looking at its acquisition by General Dynamics as "pretty much business as usual." She said Motorola had announced in May that it was looking for a potential partner for the group.

General Dynamics, based Falls Church, Va., specializes in shipbuilding and marine systems, land and amphibious combat systems, information systems and business aviation.